Trump’s Steep Tariffs Rock Markets, Reshape Alliances

OPEC+ Unexpectedly Speeds Up Oil Output Hikes, Oil Drops

LONDON/MOSCOW – Eight OPEC+ countries unexpectedly agreed to advance their plan to phase out oil output cuts by increasing production by 411,000 barrels per day in May. This decision prompted oil prices to extend earlier sharp losses.

Oil prices, already down over 4% due to U.S. President Donald Trump’s announcement of tariffs on trading partners, saw further declines after OPEC updated its plans. Brent crude dropped over 6% to below $70 a barrel.

Originally, eight members of OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies led by Russia, had been scheduled to raise output by 135,000 barrels per day in May. However, after an online meeting, the group announced it would boost output by 411,000 bpd in May, citing “continuing healthy market fundamentals and the positive market outlook.”

The increase aims to reduce fears of disruption to Iranian supply as Trump restores maximum pressure on Tehran. The U.S. President, who has called on OPEC to lower prices since starting his second term, may visit Saudi Arabia as soon as next month.

The May hike is part of a plan by Russia, Saudi Arabia, UAE, Kuwait, Iraq, Algeria, Kazakhstan, and Oman to gradually unwind their most recent output cut of 2.2 million bpd, which came into effect this month. OPEC+ also has 3.65 million bpd of other output cuts in place until the end of next year to support the market.

The decision partly reflects OPEC+ leaders’ wish to improve compliance with production quotas. Kazakhstan’s record output has angered several other members, including top producer Saudi Arabia. OPEC+ is urging Kazakhstan and other members to make further cuts to compensate for excess production.

Production in Kazakhstan could drop this month, and exports could decline after Russia ordered the shutdown of some export capacity on the CPC pipeline. The eight OPEC+ countries will meet on May 5 to decide on June output.